Soft drinks, be it flavoured carbonates, energy drinks, Ready-to-drink (RTD) iced coffee, juices or sports drink, continue to be one of the prime reasons for which a shopper walks into a convenience store. Not only this section is a great footfall magnet, it is also a great precursor of impulse and cross-category purchase.
Considering the fact that soft drinks category is now worth more than £2.7billion in convenience- third most valuable category to independent retailers- having a well-stocked soft drink section is a quick and easy mantra for better sales and overall growth of a store. Quite obviously, taking an extra care in this aisle can go a long way in pushing sales and creating a unique brand image of the store.
Soft drinks continue to perform well at a total level, +9.5 per cent value, with Sports and Energy taking the lead. In fact, energy is the largest soft drink category in the independent channel and with £1 in every £3 spent on soft drinks being spent on an energy drink.
Adrian Hipkiss, Marketing and International Business Director at Boost Drinks, states that it’s the energy stimulation drinks which play a significant role in contributing to the growth of the soft drinks category, growing +14 per cent and accounting for 26 per cent of all Soft Drink value sale.
Consumers have been feeling the pinch from rising living costs and inflation this last year, with increasing numbers being mindful of the amount they spend. In a bid to make their money stretch further, these pressured shoppers are expected to move toward smaller transactions and smaller pack sizes.
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However, soft drinks, juices, energy drinks and even bottled water is one of the segments of the store that is expected to remain unaffected in this chaos.
Despite challenges presented by the cost-of-living crisis, total carbonated soft drinks (CSD) volume sales in 2022 exceeded those seen in 2019 by 3.3 per cent. This highlights the category’s resilience to squeezed incomes, supported by the drinks’ affordability and their roles as mood-boosting treats and alcohol replacements. However, the record-breaking summer weather also has been a key contributing factor to the market’s buoyancy.
Ben Parker, GB Retail Commercial Director at Britvic, points out the presence of ‘lipstick effect’ in this segment as shoppers switch from expensive purchases to treating themselves with smaller treats and indulgences.
“As inflation is set to continue, it’s important for retailers to offer choice to shoppers who will all be impacted differently – there’s no one size fits all solution. This should include a range of on-
the-go options, in addition to multipacks and larger bottles, as well as price-marked packs (PMPs) as people will continue to look for value for money to help manage their budgets,” Parker tells Asian Trader.
Milk drinks too have shown themselves to be a resilient and consumer-favourite product. The return of more out of home occasions, whether that’s grabbing a snack at work or whilst out for leisure, has even contributed to their growth in the past few months.
What’s best, What’s new
Boost is the only brand operating in four functional drink categories – Energy Stimulation, Sports Drinks, RTD Iced Coffee and Protein Shakes. Boost Original is available in 1litre, 500ml and Boost’s leading SKU, the 250ml Original Energy.
Boost Red Berry is the largest selling 250ml Stimulation Flavour SKU, however considering the fact that 39 per cent of Stimulation shoppers actually make their purchase based on flavour alone, it’s important to stock a variety of flavours rather than relying on one or two.
There has been an optimistic turn for the Sports Drinks category with the easing of restrictions, increase of footfall and the return of a pre-pandemic sense of normality.
Sitting at the forefront of the category’s growth pattern with its +84 per cent value growth, Boost Sport is currently the number two Sports Drink brand in value and volume, selling more unit sales than the third, fourth and fifth brands combine,” Hipkiss tells Asian Trader.
The protein sector also continues to be an important part of the functional drinks. The fact that the sector is currently growing at “+51 per cent YOY can largely be attributed to Boost Strawberry Protein shake (310ml), which is the largest growing SKU in unit”, says Hipkiss.
Another popular sub-segment in this category is RTD Iced Coffee which is growing rapidly, with Symbols and Independents sales having now grown to over £42m.
With 73 per cent of sales value made on four flavours – Latte, Caramel, Espresso & Mocha, Boost is now the second largest selling and fastest growing RTD iced coffee brand in unit sales, says Hipkiss.
Flavoured carbonates are the third largest category in soft drinks, he adds, pointing that Rio offers huge growth opportunities for retailers.
Boost Drinks is diversifying its portfolio with new products in both coffee and stimulation. The brand has recently added Mocha variant in its already-hit RTD coffee range. It has also expanded its popular Energy Stimulation range with the re-formulation of its Fruit Punch flavoured 250ml SKU.
Boost Drinks has recently tapped into the largest selling can segment with its new 500ml Juic’d range- made with 5 per cent real fruit juice and price marked £1.00 on pack.
Retailers should also not overlook milk-based and shakes range. To tap into the same, YAZOO remains a great option.
“YAZOO continues to perform strongly and outgrow the traditional flavoured milk market. As we progress through 2023, shoppers have looked for smaller indulgences and rewards such as a sweet treat or a drink instead of holidays and expensive treats, which milkshakes are perfectly positioned to cater for,” says Dan Chesborough, UK Sales Director at Friesland Campina.
YAZOO offers permanent PMP variants of all core flavours (Chocolate, Strawberry, Banana and Vanilla) as well as across its Limited-Edition flavours, meaning retailers can tailor their offering to whatever suits their stores.
YAZOO Choc Mint has just launched and is due to return to shelves nationwide. Previously available as a limited-edition, Choc Mint flavour was a smash hit with shoppers and demand has driven its return to the range with a consumer-driven bottle design increasing visibility in-store. The fan-favourite variant is available in standard and price-marked packs of 400ml in convenience and wholesale, while additional one-liter larger packs are also available from early March.
Every shopper need is different, so it is crucial that their favourite soft drink is available in a range of formats to help satisfy their immediate requirement. Two in three Red Bull shoppers actually go into store knowing exactly which can size they want to buy, therefore Red Bull Energy Drink is available in three different can sizes - 250ml, 355ml and 473ml.
Red Bull Energy Drink 250ml sells more packs than any other single serve soft drinkand drives the highest demand in Red Bull portfolio so an absolute must-stock for convenience retailers. Additionally, Red Bull Energy Drink 355ml and 473ml are the top two fastest growing PMP skus in Sports & Energy.
During summers as well as these core functional missions, consumers want hydration, so flavoured Sports & Energy drinks are a must-stock. Red Bull Editions are growing ahead of total Sports & Energy flavours, with the top three skus (Red Edition 250ml, Apricot Edition 250ml, and Tropical Edition 250ml) cumulatively amassing £4.3m in value sales over the summer.
Continuing its mission to offer Flavours for all Tastes, and Wiings for Your Summer, Red Bull is launching its latest Summer Edition this Spring, with the taste of Juneberry.
Available in 250ml, 250ml PMP, 255ml Sugarfree and 250ml Sugarfree-pack, the launch of Red Bull Summer Edition - Juneberry will be supported with a range of tailored POS to raise awareness instore across all key touchpoints.
Tropicana’s latest launch- Strawberry & Banana and Pineapple & Pink Guava- are pure juice blends, containing naturally occurring sugars and no added sugar, like all fruit juices.
What’s happening
Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I, states that there has been a long-term trend towards drinks with lower sugar, with 70 per cent of adults saying that they are conscious of their sugar intake.
“The low- or no-calorie segment continues to outperform regular soft drinks, with almost 70 per cent of total soft drink sales, and sugar-free carbonates in particular have grown by over 5 per cent in the last year,” says Gouldsmith, advising retailers to stock up on lower-sugar drinks such as Ribena Light, Lucozade Zero and Ribena Sparkling Zero Sugar to make the most of this ongoing trend.
Responding to concerns of tiredness, Sutory Beverage has responded with Lucozade Alert range which is a high caffeine energy drink with Vitamin B3. The new packs will showcase a new £1 PMP to help retailers drive value in their range at a time when consumers are price-conscious.
“After generating £1million in sales in under two months at launch through wholesale and convenience stores in September 2021, Lucozade Alert has invested in a new striking and colourful 500ml can design across all three flavours; Cherry Blast, Tropical Burst & Original Lucozade and launched in market in January,” Gouldsmith tells Asian Trader.
Caroline Wilding, Head of Marketing, Juices UK at Tropicana Brands Group, states that people are naturally more cost-conscious at the moment, so are going out less and looking for ways to enrich their time spent at home.
Mocktail-inspired drinks are going to have their time in the sun in the coming weeks, thanks to longer and warmer days.
“Our Sensations range, which we’ve expanded in 2023 with a new Pineapple and Pink Guava Crush flavour, blends this trend with the elevated ‘every day at home’ theme featuring flavour combinations such as Raspberry & Mango Sunset and Passionfruit Punch,” says Wilding.
Juice consumption during meals is another key consumer trend retailers should bear in mind in 2023. Juices that lend themselves particularly well to these ‘rest of the day’ moments tend to include tropical flavours, such as in Tropicana’s Sensations range: in fact, 48 per cent of Tropical flavoured NFC is consumed from afternoon onwards compared to 31 per cent of total chilled juice, says Wilding.
As exam season approaches, and the students in the family begin to buckle down to revise- another trend retailers should bear in mind are juices or soft drinks which support mental focus.
“Tropicana+ Fuel For Thought, launched last year, taps into the consumer desire for healthy ‘pick me ups’ that can support normal psychological function, a topic of increasing prevalence for consumers,” Wilding tells Asian Trader.
Drinks that provide a vitamin boost and can be conveniently picked up on-the-go, can satisfy this growing trend. For example, Fuel for Thought, with added B3 and B6 vitamins to support normal psychological function, was the first in the chilled juice category to offer this and achieved a total RSV of £840k since launch.
Flavour is the key which is driving the growth of Sports & Energy. As a result, flavoured Sports & Energy drinks are up +21.9 per cent vs unflavoured at +10.7 per cent, with tropical flavours a core opportunity, growing 22.5 per cent vs mainstream flavours at 14.5 per cent.
Red Bull is instrumental to the strong performance, outperforming total flavoured Sports & Energy by four times at +92 per cent. For a long time, the Red Bull portfolio has been about offering choice, ensuring the right product is available for each shopper at their point of need.
As a result, low and no sugar soft drinks are the best-selling sector (+£1.5bn) and fastest growing. Red Bull offers no-sugar variants in both Single Serve and Multipacks as well as Red Bull low calorie Single Serve and Multipacks. The brand’s best-selling low-calorie drink is Red Bull Sugarfree 250ml.
Makers like Britvic are leaving no stone unturned to offer healthier and less-sugary versions.
“As a category we were well prepared ahead of the legislation, following the introduction of the Soft Drinks Industry Levy which came into effect in 2018. Last year we also reduced the sugar content across our Rockstar core range of energy drinks, making the brand’s six best-selling flavours HFSS compliant,” Parker tells Asian Trader.
It’s no longer just about removing sugar or calories from diets. Shoppers are on the lookout for added vitamins or ingredients that can support both physical and mental health.
Parker states that Purdey’s has broad appeal, making it perfectly placed to lead in the wellness drinks segment. Additionally, Britvic has launched Robinsons Benefit Drops, available in four flavours, each with a different added functional benefit.
Pure juice drinks too are performing well.
“Last year we expanded our Robinsons Ready to Drink range, capitalising on this growth. Launched in March 2022, Blackberry & Blueberry is the third flavour to the line-up,” says Parker.
“We bolstered our Pepsi MAX flavours last year with the new addition of Pepsi MAX Lime and also launched Tango Editions, a rotational sugar- free flavour series,” says Parker from Britvic.
The most recent flavour in this series is the Tango Paradise Punch Sugar Free and Tango Dark Berry Sugar Free.
Stocking Smartly
To attract footfall and trigger impulse purchase, retailers should ensure that they are well-stocked with top leading brands- Coca-Cola, Pepsi, Fanta Lucozade, Red Bull, Britvic’s Robinsons, Tango, and J2O, Schweppes, Ribena and Dr Pepper. To become a popular hotspot among younger generation, stocking Monster, Irn Bru, Relentless, Boost, Tenzing and Refrescco’sPRIME is the key.
It is also a good idea to stock leading brands of bottled water like Highland Spring, Evian, Buxton Spring, Llanllyr Source, Deeside, Berrington, Speyside Glenlivet and TY Nant.
Visibility is key, and stores can convert more shoppers to buy if the brands are easy to find.
Tropicana’s newly revitalised packaging, which is bright, bold and places a spotlight on the fruits the juices contain, offers real added value here.
Retailers should also consider transitioning from traditional soft drinks to energy and coffee drinks to go – milkshakes are the perfect product to place between these two areas.
Though YAZOO and Chocomel are ambient products, with longer shelf life than typical milk products, retailers should consider stocking the drinks in chiller aisles with more footfall than back of store sections, says Chesborough. Additionally, brand blocking placement on shelf and targeted POS can help to further attract shoppers’ attention.
“By dedicating space to both best-selling flavours and new launches from reliable brands, shoppers are likely to try new variants and formats from brands they already know, love and ultimately trust. They help keep your offering different, and consumers already trust their reputations when they want to try something new,” Chesborough tells Asian Trader.
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With additional bank holidays planned and the expectation of more warm weather, having Red Bull Editions on shelf this summer will be vital for driving sales. With the new Apricot Edition now a permanent line in the Red Bull portfolio and a limited Summer Edition for 2023 hoping to drive excitement in the category, make sure you have plenty of availability in the fridge ready for immediate consumption.
When it comes to soft drinks specifically, the continued demand for delivery slots and click-and-collect services presents an opportunity for larger pack formats as they are more likely to be added to an online shopping basket for practical reasons.
“However, we must remember that soft drinks are an impulsive category. This means it’s important for suppliers and retailers to consider different ways to encourage online shoppers, who are harder to reach and are meticulously planning their shop, to choose and purchase soft drinks,” says Parker.
Protein shake drinkers consume 9.1 units per month, a rate that is higher than Energy, Sports or Iced Coffee.
With this in mind, retailers should make the most of the growing demand for protein drinks through avenues such as store merchandising, ensuring products are sited within the right areas by brand, size and need with clear messaging where applicable, says Hipkiss from Boost Drinks.
Just Chill
Despite the current challenges on shoppers’ household income, soft drinks performance remains resilient, growing faster than other key FMCG categories. Switching to own label is key savings strategy although soft drinks are still the exception indicating strong level of brand loyalty here.
As shoppers spend less on non-essential items, such as alcohol and tobacco, soft drinks continue to play an important role in customers repertoire.
While flavour continues to be the core innovation battleground in this market, texture should not be overlooked, states a report by Mintel, adding that almost half of the Brit drinkers express an interest in different textures, which presents an opportunity for innovation.
The introduction of Deposit Return Schemes (DRS) may also act as a deterrent for purchasing soft drinks and bottled water. However, by lessening the negative connotations with single-use packaging waste, DRSs should help keep consumers engaged with this category in the longer term.
Moving forward, as consumers spend less cautiously and the alcohol moderation movement becomes more widespread, a huge growth is expected in soft drinks, energy drinks and RTDs.
Remember, consumers are both looking for new tastes and are still attached to their favorite go-to drinks. Therefore, keeping the balance between innovation and taste is the key to success.
Additionally, polarisation in personal finances is presenting new opportunities for convenience and independent retailers to maximise customer spend from more affordable soft drink range to ‘premium’, ‘value’ and treat’ shopping occasions.
As the weather changes and days become sunnier, keep your store’s sales well-hydrated with a wide, wholesome range of soft drinks, juices and cans. Keep them chilled and sell some more!
Fed National President Mo Razzaq
Fed National President Mo Razzaq
